Correlation Between Sun Max and Intai Technology

Can any of the company-specific risk be diversified away by investing in both Sun Max and Intai Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sun Max and Intai Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sun Max Tech and Intai Technology, you can compare the effects of market volatilities on Sun Max and Intai Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sun Max with a short position of Intai Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Max and Intai Technology.

Diversification Opportunities for Sun Max and Intai Technology

0.25

Correlation Coefficient

Sun Max  Intai Technology

Modest diversification

The 3 months correlation between Sun and Intai is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sun Max Tech and Intai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intai Technology and Sun Max is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sun Max Tech are associated (or correlated) with Intai Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intai Technology has no effect on the direction of Sun Max i.e., Sun Max and Intai Technology go up and down completely randomly.

Pair Corralation between Sun Max and Intai Technology

Assuming the 90 days trading horizon Sun Max Tech is expected to generate 1.32 times more return on investment than Intai Technology. However, Sun Max is 1.32 times more volatile than Intai Technology. It trades about 0.04 of its potential returns per unit of risk. Intai Technology is currently generating about 0.02 per unit of risk. If you would invest  3,923  in Sun Max Tech on October 13, 2024 and sell it today you would earn a total of  1,277  from holding Sun Max Tech or generate 32.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sun Max Tech  vs.  Intai Technology

Sun Max Tech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Max Tech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sun Max is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Intai Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intai Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Intai Technology is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sun Max and Intai Technology

The main advantage of trading using opposite Sun Max and Intai Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Max position performs unexpectedly, Intai Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Intai Technology will offset losses from the drop in Intai Technology's long position.

The idea behind Sun Max Tech and Intai Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.